The announcement that Chobani fired Droga5 as its agency of record (AOR) and is taking most of its creative advertising activities in house, is certainly nothing new in the ad business.
Chobani’s marketing head, Peter McGuinness, is a seasoned advertising pro with previous jobs at DDB and McCann. And therein lies the reason why so many brands go in house. Former ad agency executives have found lucrative salaries and very desirable job security by migrating to the client side simply by convincing company CEO’s that it makes economic sense to move marketing and advertising in house.
The trend started in the 80’s and 90’s when large advertising firms were laying off seasoned ad execs (aged 50-60) who were comfortably making six-figure salaries. Since these execs were hard pressed to find jobs at other ad agencies, they migrated to the client side with one simple brand promise: “make me the head of your marketing and I’ll save you more money in the first year to more than pay for my six-figure salary twenty fold. I will take the media buying in-house and with the agency media commissions we save, we can hire an in-house marketing staff that I will supervise….and have millions left over to apply towards our marketing initiatives.” And so the die was cast.
In firing Droga5, Chobani issued a statement: “We’re fortunate to have great agencies who have partnered with us at different stages of our growth. Recently, we decided to change our approach and move from an AOR model to more in-house and project-based agency partners.”
Certainly, growth in the consumption of Chobani’s Greek-style yogurt has slowed after several years of rapid growth and amid fierce competition from players such as Danone and Yoplait, but that would only be more reason why Chobani would need the professional account planning guidance and research strength of an experienced (and creative) packaged goods agency to help it launch new yogurt pouches for kids and additions to its snack and dessert-oriented product lines.
It has been my experience that most in-house agencies (with a few exceptions) lack the strategic insights and creative excellence required to become category leaders or maintain category ownership for their brands.
If you look at the “new creativity” in the insurance category over the past several years with marketers such as Geico by The Martin Agency, or Farmer’s, Progressive and Allstate, these inventive campaigns were conceived and executed by AOR’s, not in-house departments.
I would also venture to say that 99% of highly creative and effective campaigns in retail (Walmart), automotive (Buick), travel/hospitality (Vegas), beverages (Gatorade), food service (Red Lobster) and many other industries are the work product of AORs, not in-house departments. Like the new Wake up with Bacon creative work by Grey New York for The American Egg Board.
And as I write this, Brian Brooker, the Chief Creative Officer at Bernstein-Rein is leaving to accept an ECD position at the in-house marketing department of Garmin Industries, best-known for its GPS and other navigational devices.
So, today it’s not just laid-off agency executives joining in-house operations, it’s veterans like Brooker with more than 30 years of ad industry experience, taking the leap for greener pastures…and I suspect, greater job security.
In the final analysis, if client side CMOs and Marketing Directors really want job security, they should search harder to find the right agency, make the agency a true partner in their business, jointly develop marketing strategies and creative briefs approved by the C-Suite, and give the agency the freedom to do what they do best…make brilliant ideas come to life.
STUART DORNFIELD is an award-winning freelance Creative Director/Copywriter who has worked with more than 200 clients in b2c and b2b industries across digital and traditional freechannels.www.stuartdornfield.com